LIVING WAGE $ Regina s PER HOUR

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1 Regina s LIVING WAGE $ PER HOUR For Regina in 2016 the Living Wage is $16.95 per hour. This is the wage that allows a family living in Regina, Saskatchewan to meet basic nutrition, housing, and transportation needs, not fall into poverty, participate in community life, and plan for the future.

2 The Living Wage is calculated by estimating reasonable expenses for a family of four two parents and two children aged 4 and 7. For this family, when both parents are employed full-time at an hourly wage of $16.95, monthly after-tax income is $5,147. In addition to employ ment income this family receives child tax and other benefits from the federal and provincial governments to produce an annual income of $61,766. When both parents are paid the Living Wage or more, the family can live at a comfortable but not extravagant level. To set the Living Wage in perspective, a family with both parents working full-time at the Saskatchewan minimum wage would earn more than if they relied on Social Assistance benefits. But a minimum wage income still keeps the family at poverty level. A Living Wage income in 2015 was approximately $25,000 above a poverty level but well below average family income. For Saskatchewan couple families, in 2014 one-half had incomes of $97,200 or more and the average income was just above $100,000. We estimate that 24 percent of employees who live in Regina earn less than a Living Wage. Twenty-nine percent of female employees and 20 percent of male employees receive these low wages. While it is common for young employees to have relatively low wages, 55 percent of those earning less than a Living Wage are aged 25 or more. Annual family income, Regina* $97,200 $102,900 $25,806 $36,327 $37,538 $61,766 Social Low Income for two Living Wage Median Average assistance income at minimum income after-tax after-tax 2014 threshold wage 2015 income income SK 2014 SK 2014 *Based on latest available data. 2 CCPA Saskatchewan Office Regina s Living Wage October 2016

3 What is a Living Wage? A Living Wage is the hourly wage rate at which a household can meet its basic needs, once government transfers have been added to the family s employment income and tax deductions have been subtracted. The Living Wage is different from the minimum wage, which is the legislated minimum set by the provincial government. The Living Wage calls on employers to meet a higher standard for both their direct staff and major contractors it reflects what people need to support their families based on the actual costs of living in a specific community. The Living Wage provides an income to meet necessary expenditures and ensures that a family does not slip into poverty. Parents and children can participate in work, life, recreational, and community activities. But it is not a lavish wage it doesn t allow families to save for retirement, post-secondary education for children, home ownership or service existing debt. There is only a minimal income cushion in the case of a family emergency. Calculating a Living Wage We began by estimating annual household living expenses for a family of four. Our model family has two parents aged between 30 and 50 with two children a male aged 7 and a female aged 4. Each parent works full-time at 35 hours per week for the full 52 weeks of the year, a total of 1,820 hours per year for each parent. We assume that the only benefits provided by employers are paid vacation, statutory holidays, and sick leave mandated by Saskatchewan Employment Standards. Food expenses are based on the cost of the National Nutritious Food Basket as estimated by the Public Health Nutritionists of Saskatchewan. The family rents a three bedroom residence in Regina and the rental rate includes water, sewer, and heating. Electricity and renters insurance costs have been added to this. For trans portation, we include the annual expenses associated with purchasing, maintaining, and driving one used automobile. We also include the annual cost of one Adult Regina Transit pass. Clothing and household expenses are obtained from Statistics Canada s Market Basket Measure of typical family expenditures in large Saskatchewan cities. The four year old child is enrolled in full-time daycare and the seven year old child is enrolled in a before and after school program at licensed Bare Bones Monthly Budget Shelter $1,380 Child Care $1,005 Household $829 Food $821 Transportation $492 Contingency $197 Clothing/Footwear $175 Health Care $131 Parents Education $117 Total $5,147 Regina s Living Wage October 2016 CCPA Saskatchewan Office 3

4 Regina day cares. The older child attends a fulltime child care program in July and August. In order to upgrade their skills and credentials in search of better jobs, each parent is enrolled in the equivalent of one post-secondary course each year. These are courses offered at the Saskatchewan Polytechnic Regina campus, the University of Regina or obtained online we assume an annual tuition expense of $600 for each parent. Expenses include the cost of a Saskatchewan Blue Cross Personal Health Plan that covers core, prescription drugs, and dental expenses for the family. After adding all the above, an additional two weeks pay is included as a small contingency fund in the case of unforeseen expenses or emergencies. Family expenses total $61,766 for the calendar year 2015; this means the family budget is $5,147 per month. Distribution of expenses for a Regina family of four 27% 19% 16% 16% 10% Shelter Child Care Household Food Transportation Contingency Clothing Health Care Parent Education 4% 3% 3% 2% After estimating these household expenses, the Living Wage of $16.95 per hour is obtained by balancing the following equation: Expenses = Employment Income + Government transfers Income and payroll taxes $61,770 Expenses = $61,860 Employment income + $5,750 Government transfers + $5,840 income and payroll taxes Taxes include Canada Pension Plan and Employment Insurance premiums and federal income tax total family income is low enough that no provincial income taxes are payable. The transfers are primarily the Canada Child Tax Benefit and the Universal Child Care Benefit for 2015, with smaller federal and provincial tax credits received by the family. 4 CCPA Saskatchewan Office Regina s Living Wage October 2016

5 Distribution of after-tax income, families of two or more 37% $100,000 plus 16% $80,000 to $100,000 13% under $40,000 14% $40,000 to $60,000 20% $60,000 to $80,000 In 2014, approximately 29 percent of Saskatchewan families of two or more persons had an annual income less that the Regina Living Wage income of $61,766 Comparable data for Regina are not available but we estimate that 23 percent of families in Regina had incomes below what a Living Wage would provide. In Regina in 2010, 12 percent, or approximately 25,000 persons, were in poverty. Paying a Living Wage to all employees in the city would move these people above the poverty level and help improve the lot of individuals and families Living Wage and Social Policy The Living Wage campaign is primarily a call to employers in the business, cooperative, government, and community sectors to pay wages that will sustain families and assist them in improving their lives. This can be achieved directly by paying higher wages or through a combination of greater wages and improved employer and government benefits. Improved employer benefits include health benefits, paid sick and parental leave, and employer provided day care. Government benefits include increased day care subsidies, reduced taxes for low income families, and reduced tuition. Each improved benefit would reduce a family s expenses, thus reducing the wage that employers would need to pay to achieve a Living Wage. For example, in 2016 the federal government introduced the Canada Child Benefit (CCB) program while eliminating the Canada Child Tax Benefit and the Universal Child Care Benefit. These changes took effect on July 1, 2016 and become applicable for the full year in The CCB provides for $6,400 per year for a child under age 6 and $5,400 per year for a child aged 6 to 17. These benefits are not taxable but are reduced as family income increases. For the Regina Living Wage family, the CCB will increase federal transfers by approximately $5,500 once fully operational. This increase in transfer income received by the family means that the Living Wage could be reduced by as much as $1.95 per hour. While other expenses are anticipated to increase by 2017, it is certainly possible that the Living Wage could be closer to $15 per hour in 2017 as improved federal benefits will allow the family to meet their expenses even with a lower Living Wage. Another example of how progressive social policy influences the living wage comes from Quebec. The Saskatchewan government could follow the Quebec model and provide child care at a basic rate of $8 per day. This would reduce child care expenses for the Living Wage family by as much as $600 per month. The effect of this would be to reduce by $2.00 per hour the wage required for this family to meet expenses. Regina s Living Wage October 2016 CCPA Saskatchewan Office 5

6 What a Living Wage Can Do A Living Wage for working people will: Reduce poverty by ensuring that public and private employers pay workers enough to meet families actual costs of living. Help close the gap between male and female wages. Increase workers purchasing power, thus bene fiting families, businesses, communities and the local economy. Reduce employee turnover and associated employer training costs while raising employee productivity and morale. Paying a Living Wage In 2011, the City of New Westminster, British Columbia, became one of the first Living Wage employers in Canada, requiring that all firms contracting directly or indirectly with the city to provide services on city premises pay their employees a Living Wage. In British Columbia, companies and organizations as diverse as Vancity Credit Union, the United Way, the Canadian Cancer Society and the BC Teachers federation are all certified Living Wage employers. The City of Vancouver and the City of Port Coquitlam are currently Living Wage supporters; they have living wage policies in place and are engaged in the hard work of bringing all direct and contract staff up to a living wage. In November of 2015, the City of Cambridge became the first municipality in Ontario to pay a Living Wage. Ontario has seen an explosion of Living Wage employers in the past few years, with companies and organizations like Muskoka Brewery, the Hamilton Chamber of Commerce, the Hamilton-Wentworth School Board, YWCA Kitchener-Waterloo and many more joining the Living Wage movement in that province. Over 140 Living Wage ordinances have been adopted in cities throughout the United States, including New York, Boston, San Jose, Baltimore, Santa Fe and Minneapolis. We encourage employers to adopt the Living Wage for their own employees and require it for those with whom they conduct ongoing business. We also hope that citizens, businesses, and community organizations will urge employers and governments to improve employees and social benefits. Each of these will help lower income families improve their lives. The Regina Living Wage calculation follows the Living Wage model for Vancouver and other Canadian cities that was pioneered by the BC Office of the Canadian Centre for Policy Alternatives. Special thanks to Chuk Plante for his assistance with this calculation. For more information on the Living Wage please contact the Canadian Centre for Policy Alternatives Saskatchewan Office. ccpasask@sasktel.net (306) For a detailed explanation of the Living Wage methodology, visit: 6 CCPA Saskatchewan Office Regina s Living Wage October 2016